Business Value Enabled by HPE Datacenter Care Service

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1 Sponsored by: HPE Authors: Elaina Stergiades Rob Brothers Matthew Marden May 2016 Business Value Enabled by HPE Datacenter Care Service EXECUTIVE SUMMARY As more enterprises adopt technologies such as cloud, mobile, and analytics to help achieve strategic competitive advantage, CIOs and IT managers must support business-critical processes at a very high level across the enterprise. At the same time, IT organizations must manage complex hybrid IT infrastructures that include both cloud and on-premises technologies from multiple vendors and support providers. Business Value Highlights Three-year ROI 413% Average three-year discounted business benefits per 100 users $105,338 Less unplanned downtime 89% More efficient datacenter management operations 28% Faster application development 14% Additional revenue per 100 users per year from reduced downtime and improved operations $18,014 IDC believes that to tackle these challenges, IT organizations should look to support providers for comprehensive offerings to help optimize IT operations and improve the efficiency of IT service delivery. In addition, IDC recommends that IT organizations looking to manage rapid change in today s IT landscape consider support providers with a record of innovative support services and a focus on advanced technology in support delivery. IDC interviewed six organizations to measure the business value they are achieving by supporting mission-critical business workloads and applications with HPE Datacenter Care service. Interviews with these HPE customers demonstrated that they are leveraging support, guidance, and best practices from HPE through Datacenter Care to make their IT operations more reliable, efficient, and effective. IDC calculates that using HPE Datacenter Care will enable these organizations to record business benefits worth an average of $105,338 per 100 users of IT services and earn an average return on investment (ROI) of 413% for their investment in Datacenter Care. These business benefits are the result of HPE Datacenter Care enabling these organizations to:» Minimize the operational and business impact of system and application downtime» Improve the efficiency of IT staff members, allowing them to focus on innovating for the business by utilizing IT assets more effectively» Identify cost savings in provisioning datacenter hardware, allowing for potential reallocation of funds for business development Document # IDC. Page 1

2 » Drive business by improving the performance of important workloads and speeding up application life cycles» Adopt new technologies and new IT models faster and with less risk In This White Paper This IDC white paper describes the challenges facing CIOs and IT managers in today s complex IT environments, with a focus on how support services can evolve to anticipate changing customer requirements. It highlights the importance of support services in maximizing IT service delivery and improving IT system performance. The document also provides an overview of HPE Datacenter Care service, including an analysis of how HPE customers are realizing business value by using HPE Datacenter Care. Demographics IDC carried out interviews with six organizations in the United States, the United Kingdom, Australia, and the Middle East to measure the impact of using HPE Datacenter Care service on their operations and business. Respondents reported that they are using HPE Datacenter Care to support mission-critical workloads, including customer-facing operations, and to support an average of 909 servers. Table 1 provides an aggregate profile of the organizations interviewed for this study. TABLE 1 Demographics of Interviewed Organizations Average number of employees 9,167 Average number of IT staff 342 Average number of IT users 9,065 Average number of servers managed by 909 HPE Datacenter Care Average number of IT staff supporting the 23 HPE Datacenter Care environment current Average capacity of storage environment in the HPE Datacenter Care environment Industries Regions Source: IDC, PB Financial services, telecommunications, transportation, healthcare, and insurance United States, EMEA, and Asia/Pacific Document # IDC. Page 2

3 Situation Overview As global competition for customers and markets intensifies, enterprises must be able to respond quickly to changing customer requirements and new market opportunities. To accomplish this, enterprises rely on complex IT infrastructures to enable business-critical processes and increase employee productivity. Unfortunately, managing these complicated IT environments can present significant challenges for resource-strapped IT organizations increasingly focused on driving bottomline revenue. CIOs and IT managers must transition from managing legacy IT assets to driving strategic technology initiatives that directly affect the business. As a result, more IT organizations are seeking help from support providers to improve ongoing IT operations and plan for new technologies that must be deployed quickly to meet new business requirements. Key IT Challenges Across the Enterprise Today s CIOs and IT managers are dealing with a number of challenges in the face of constant change and new opportunities. IDC research has identified the following critical issues in 2016and beyond:» Optimizing IT service delivery. CIOs and IT managers are driving initiatives aimed at maximizing system performance to enable business-critical processes and meet demanding internal and external SLAs. IT organizations are partnering with business managers to ensure success across the enterprise, with a focus on projects that can improve productivity and drive revenue growth. As part of these efforts, significant investments are being made to minimize unplanned downtime and performance degradations that can directly affect the business.» Improving resource management across IT. With fewer resources and declining budgets, CIOs must contain and reduce the cost of IT while improving the quality of service. Although budgetary pressures remain a critical consideration, optimal resource allocation is also a growing challenge for IT organizations. Savvy CIOs and IT managers are shifting resources away from maintaining existing infrastructure toward innovative investments that can directly affect the bottom line.» Managing IT complexity. IT organizations are introducing a number of new technologies like cloud and mobile to take advantage of benefits such as increased power, flexibility, and agility. However, while the benefits are often immediately evident for business users, that is not necessarily the case for IT management where the added complexity can make optimization and ongoing support very difficult. Document # IDC. Page 3

4 Given the size and complexity of today s IT environments, and the challenges associated with supporting the mix of cloud, on-premises, and legacy IT systems, CIOs and IT managers are looking to support providers for expertise and assistance. IT infrastructures today often require a comprehensive approach to support across integrated systems and heterogeneous technology and the old models of support delivery fail to meet the support demands of the modern datacenter. Evolution of Support to Address IT Challenges Over the past 10 years, the importance of IT infrastructure in customer environments has altered the support landscape dramatically. Historically, support services were largely focused on reactive support: fixing problems as they occurred, providing patches and updates when required, and responding to customer requests for new features and functionality. However, given the current size and scope of most IT environments, and the challenges outlined previously, reactive support services alone cannot properly support today s datacenter. IT organizations need support providers that can help identify, isolate, and resolve potential issues before they affect critical IT systems and disrupt business processes. In addition, IT managers are increasingly looking to support providers for services outside traditional support engagements (such as process automation and as-a-service platform and infrastructure offerings). In fact, recent advances have increased the need for comprehensive offerings that can merge support services and IT operations delivery. This evolution of support is detailed in Figure 1. FIGURE 1 Evolution of Support Services Predictive Support» Infrastructure-based support» Increased automation» Analytics Proactive Support» Health checks» Patch recommendations» Expanded online self-help Reactive Support» Medals model standard» Centralized support Source: IDC, 2015 Document # IDC. Page 4

5 As a result, over the past five years, support providers have made significant changes to their offerings for enterprise IT customers. New and expanded capabilities include the following:» Integrated, comprehensive multivendor support to provide a single point of contact for issues and eliminate the finger pointing that often arises in cross-vendor support» Tools and utilities designed to help isolate and resolve customer problems more quickly» Remote support solutions that allow access to customer IT environments to help reproduce problems and resolve defects» Key supportability features built into enterprise hardware and software to detect customer issues in the field» Preventive and predictive analytics that can identify and resolve potential issues before they affect critical systems as well as provide operational guidance for the IT environment» Services that can help optimize IT service delivery that are outside the scope of traditional support engagements, such as deploying IT process automation or infrastructure-as-aservice and platform-as-a-service offerings CIOs and IT managers must transition away from maintaining legacy infrastructure and focus on implementing new technology initiatives that can help drive business performance. Faced with implementing new technologies that will drastically alter their IT infrastructure, IT organizations are seeking support providers that can incorporate these new capabilities into broad support offerings that can cover all aspects of the datacenter. Support packages and deliverables that can help IT organizations improve ongoing IT operations while shifting resources from maintenance to strategic, innovative initiatives will be well positioned in 2016 and beyond. HPE Datacenter Care Service HPE Datacenter Care service is a portfolio of service offerings that can provide customers with a comprehensive support team to address server, storage, and network infrastructure sourced from multiple suppliers under a single consolidated service contract. This capability is designed to reinforce the single-point-of-contact value proposition and avoid cross-vendor finger pointing when problems occur. HPE designed its Datacenter Care service to enable a customer experience beyond the proactive support capabilities to either add functions or tailor the service to specific environments. Datacenter Care provides the following capabilities: Document # IDC. Page 5

6 » Datacenter Care Flexible Capacity is an as-a-service infrastructure offering that provides datacenter managers with an opex option as well as self-service features and functionality to its users.» Datacenter Care for Cloud addresses the needs of private and hybrid cloud environments built on HPE CloudSystem infrastructure, HPE Helion OpenStack, and HPE cloud management software. A primary feature of Datacenter Care for Cloud is its linkage to, and collaboration with, the HPE Software Premier Support plan. This allows enterprises to orchestrate SLAs across a cloud environment and provides guidance on managing application workloads.» Datacenter Care Operational Support Services provides HPE best practices for operating on-premises infrastructure by delivering 24 x 7 remote infrastructure monitoring and operational services. It addresses the service operations stage of the infrastructure, servers, storage, networking, operating system, hypervisor, backup and restore, and security throughout the IT service life cycle.» Datacenter Care for Multivendor allows for single-source capabilities across heterogeneous IT environments. Datacenter Care for Multivendor provides a single point of accountability across hardware and operating environments from multiple eligible vendors. This can simplify service management and problem resolution across the entire datacenter.» Datacenter Care Infrastructure Automation treats the datacenter as software that can be designed, documented, version controlled, tested, and deployed using the same tools and processes software developers use. Datacenter Care Infrastructure Automation is designed to provide the technical advice, processes, and tools needed to automate the datacenter, including eligible multivendor products.» Datacenter Care for SAP includes coverage for systems running SAP products. SAP ecosystems are generally critical to business outcomes and play an integral part in meeting strategic objectives. To assist in realizing a sustained benefit from an SAP investment, HPE provides a Datacenter Care enhancement for SAP, including the Flexible Capacity offering. Business Value Enabled By HPE Datacenter Care Service The HPE customers interviewed for this study chose Datacenter Care to ensure the stability and availability of key systems and applications critical to their businesses. IT managers from these organizations repeated similar themes in explaining their use of Datacenter Care, including quality of support, peace of mind, and increased confidence in their IT environments. Document # IDC. Page 6

7 Datacenter Care offers ease of mind about the stability of our infrastructure. That s what I think about that we don t have to worry about the systems and services that are covered there. We ve found that HPE is the best provider. We stay with Datacenter Care because of their service offering they provide excellent people, it s managed very well, and we get consistent, predictable results. And year over year, they often exceed our expectations. As one IT manager explained, Datacenter Care offers ease of mind about the stability of our infrastructure. That s what I think about that we don t have to worry about the systems and services that are covered there. Another IT manager explained the value of Datacenter Care to his company as follows: We ve found that HPE is the best provider. We stay with Datacenter Care because of their service offering they provide excellent people, it s managed very well, and we get consistent, predictable results. And year over year, they often exceed our expectations. Beyond achieving strong operational efficiencies with HPE Datacenter Care, several interviewed organizations credited support and guidance from HPE with helping them adopt and embrace new technologies such as cloud computing and mobility. For these organizations, driving innovation through these types of IT initiatives is an important component of their ability to meet the evolving needs of their lines of business and customers. Financial Benefits of HPE Datacenter Care HPE customers using Datacenter Care create value by making their operations more reliable and efficient. IDC projects that the Datacenter Care customers interviewed for this study will achieve annual financial benefits worth an average of $44,307 per 100 users of IT services over three years, or $4.02 million per organization. These benefits will fall into the following four areas (see Figure 2):» Risk mitigation user productivity benefits: HPE customers experience less unplanned downtime and resolve downtimes faster with the support of Datacenter Care. This means employees lose far less productive time because of unplanned outages. IDC projects that these organizations will benefit from having additional productive time worth an average of $16,442 per 100 users per year for three years, or $1.49 million per organization.» IT staff productivity benefits: HPE customers increase the efficiency of their IT staff members because they spend less time administering and maintaining datacenter environments covered by Datacenter Care. As a result, IT teams spend less time keeping the lights on in these environments, freeing up their time for innovation and supporting the business. IDC puts the value of these IT staff efficiencies and time savings at an average of $11,661 per 100 users per year over three years, or $1.06 million per organization.» IT infrastructure cost reductions: HPE customers leverage the expertise and support they obtain through Datacenter Care to reduce spending on datacenter capex and opex. IDC calculates that these customers will save an average of $8,321 per 100 users per year over three years, or $754,300 per organization. Document # IDC. Page 7

8 ($ per 100 users)» Business productivity benefits: HPE customers optimize their datacenter environments with Datacenter Care, leading to better application performance and improved ability to address business opportunities. IDC projects the value of increased user productivity and higher revenue as a result of these efficiencies at an annual average of $7,883 per 100 users over three years, or $714,600 per organization. FIGURE 2 Average Annual Benefits $50,000 $45,000 $40,000 $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 0 $16,442 Risk mitigation user productivity benefits $11,661 IT staff productivity benefits $8,321 IT infrastructure cost reductions $7,883 Business productivity benefits Total average annual benefits per 100 users: $44,307 Source: IDC, 2015 Without Datacenter Care, there would be more incidents [with] 2,000 people losing 80 90% of their productivity because they rely on those applications [that would be impacted]. I think all of those would have a revenue impact it could be a good million dollars for a twoto four-hour incident. Risk Mitigation User Productivity Benefits HPE s customers stressed that Datacenter Care helps them achieve a central objective of keeping important business applications and workloads running. Datacenter Care supports the efforts of these organizations to maintain the highest possible levels of reliability by helping them react quickly and efficiently when problems occur and take proactive steps that minimize the likelihood of disruptions ever occurring. Interviewed organizations cited HPE s expertise and advice in improving their diagnostic capabilities, architecting their systems for reliability, and ensuring swift and effective responses when problems arise. HPE customers provided examples of how Datacenter Care has helped them minimize the likelihood of and impact of disruptions to important systems and applications:» Minimizing the impact of downtime. As a United States based transportation company explained, Without Datacenter Care, there would be more incidents [with] 2,000 people losing 80 90% of their productivity because they rely on those applications [that would be impacted]. I think all of those would have a revenue impact it could be a good million dollars for a two- to four-hour incident. Document # IDC. Page 8

9 » Maintaining a robust and current datacenter environment. As a United States based financial services company noted, With HPE working with us in our planned downtime windows, we have more current firmware levels and more current patches. That means, in general, less vulnerability. With the support of Datacenter Care, these organizations, on average, reported experiencing 68.9% fewer instances of unplanned downtime per year and resolving unplanned downtime 64.0% faster, meaning that their users lose 88.8% less productive time to unplanned outages. This means that, on average, each user of IT services at these organizations loses only 0.6 hours per year of productive time to unplanned downtime compared with 5.0 hours per year before Datacenter Care (see Table 2). TABLE 2 HPE Datacenter Care Risk Mitigation KPIs Before HPE With HPE Datacenter Care Datacenter Care Benefit Advantage Unplanned downtime Unplanned downtime instances per year % MTTR 3.7 hours 1.3 hours 2.4 hours 64.0% Unplanned downtime per user 5.0 hours 0.6 hours 4.5 hours 88.8% Planned downtime Planned downtime instances per year % MTTR 5.3 hours 4.4 hours 0.9 hours 16.7% Planned downtime per user 1.2 hours 0.9 hours 0.3 hours 26.7% Call center Calls per year 57,883 50,782 7, % Time per call 11.0 minutes 3.0 minutes 8.0 minutes 72.7% Length of calls per user 1.2 hours 0.3 hours 0.9 hours 76.1% Total user productivity impact per year 7.4 hours 1.7 hours 5.7 hours 76.6% Source: IDC, 2015 Beyond helping these organizations minimize the business risk associated with unplanned downtime, Datacenter Care enables them to better maintain and architect their datacenter environments. HPE customers mentioned being able to carry out planned downtime more regularly and with less user impact to make needed revisions and upgrades to their datacenter Document # IDC. Page 9

10 These customers reported that IT staff members responsible for the datacenter environments covered by HPE Datacenter Care are on average 28.0% more efficient with HPE s support. This enables IT staff members at these organizations to free up more time to act proactively 38.0% compared with 18.3% without Datacenter Care time that they can invest in IT innovation, enabling the business, or improving IT operations. environments with the support of Datacenter Care. This not only helps minimize the user impact of planned outages but also helps ensure high-performing and stable datacenter environments. Further, improved system and application stability means that users report fewer problems, saving them time in incident reporting. Taken together, improved stability and reliability with HPE Datacenter Care save each user at these organizations an average of 5.7 hours of productive time per year, meaning that users are losing 76.6% less productive time to these types of interruptions. IT Staff Productivity Benefits HPE customers must support IT environments that are constantly growing in terms of workloads and applications. Despite this increase in responsibilities and expectations, their IT teams are often expected to support this growth and take on more business-enabling functions without the benefit of additional staff resources. This puts a premium on carrying out day-to-day operations, or keeping the lights on, for their datacenter operations as efficiently as possible. Datacenter Care provides the support these organizations need to manage these datacenter environments more efficiently; these customers reported that IT staff members responsible for the datacenter environments covered by HPE Datacenter Care are on average 28.0% more efficient with HPE s support. This enables IT staff members at these organizations to free up more time to act proactively 38.0% compared with 18.3% without Datacenter Care time that they can invest in IT innovation, enabling the business, or improving IT operations. HPE customers reported achieving various types of IT staff efficiencies with Datacenter Care: With Datacenter Care, there s a right first time element so you don t have to repeat things because of high-quality methods of procedures And Datacenter Care helps us make the change management process better for our customers because we send them better-quality documentation and explain what we re going to be doing.» Systems monitoring. An EMEA financial institution explained that it needed to devote less staff time to monitoring its servers and systems: We re avoiding six to eight people for monitoring, which is also positive because it s not just the cost of manpower, but it improves morale by automating these types of activities.» Firmware upgrades. An Australia-based insurance company noted the benefit of having HPE s support for firmware upgrades: It s freed up engineers time. We only need one staff member doing firmware upgrades now, so it s freeing up another staff member to go work in other areas.» Change management. As a telecommunications company in EMEA explained, With Datacenter Care, there s a right first time element so you don t have to repeat things because of high-quality methods of procedures And Datacenter Care helps us make the change management process better for our customers because we send them betterquality documentation and explain what we re going to be doing. Document # IDC. Page 10

11 In addition to these areas, HPE customers noted substantial efficiencies in incident management and resolution operations as a result of fewer incidents and more effective response operations. They also cited time savings resulting from moving numerous IT vendor support contracts to a single contract as well as efficiencies from having a more central point of managing their various operations in support of HPE equipment in their datacenters (see Figure 3). FIGURE 3 IT Staff Productivity Optimization 81% 68% 51% 28% 6% Incident response Vendor management Call center Datacenter management Application management Source: IDC, 2015 We were paying too much for licenses, and HPE said, You don t need all that! It s saving us about $150,000 per year on licenses. IT Infrastructure Cost Reductions Surveyed organizations using Datacenter Care have leveraged HPE s support and expertise to optimize datacenter-related spending. By provisioning servers and licenses more efficiently, these HPE customers support mission-critical workloads more cost effectively. The United States based transportation company credited Datacenter Care with helping it optimize its compute resources: We re probably avoiding another 1,000 servers in total thanks to Datacenter Care. A United States based healthcare company credited Datacenter Care with helping it identify potential savings on licenses: We were paying too much for licenses, and HPE said, You don t need all that! It s saving us about $150,000 per year on licenses. In addition, these organizations reported benefiting from the robust nature of support from Datacenter Care to reduce ancillary expenses such as travel, training, and contractor costs. Business Impact: The Impact of Downtime on Operations and Business Because HPE customers are running mission-critical workloads on infrastructure supported by Datacenter Care, outages can lead to loss of revenue. Surveyed companies will keep an Document # IDC. Page 11

12 Surveyed companies will keep an average of over $1 million in revenue per year ($11,395 per 100 users) with the support of Datacenter Care that they would otherwise have lost because of unplanned downtime. average of over $1 million in revenue per year ($11,395 per 100 users) with the support of Datacenter Care that they would otherwise have lost because of unplanned downtime (see Figure 4). IDC translates revenue savings to operating profit by applying a 15% profit margin, which translates to an average operating margin gain of $155,000 per year per organization over three years, or $1,709 per 100 users. FIGURE 4 Revenue Savings from Downtime Reduction 14,000 $12,096 12,000 (Revenue lost $per 100 users) 10,000 8,000 6,000 4,000 2,000 0 Source: IDC, 2015 Before HPE Datacenter Care $11,395 revenue savings per 100 users per year $701 With HPE Datacenter Care We have 24 x 7 applications, so I can confidently say Okay, go ahead because of Datacenter Care. Without it, I wouldn t have the level of confidence to tell them that we ll take care of your 24 x 7 application. HPE customers also reported that Datacenter Care has had a positive impact on other areas of their operations and businesses, including improved performance of key applications and workloads, faster deployment of applications, and greater confidence in the ability of IT to support the demands of the business. These benefits translate to increased revenue and higher employee productivity as well as an improved ability to serve customers (see Table 3):» Revenue impact with business confidence: The financial institution in EMEA explained: We have 24 x 7 applications, so I can confidently say Okay, go ahead because of Datacenter Care. Without it, I wouldn t have the level of confidence to tell them that we ll take care of your 24 x 7 application.» User productivity impact: The Australian insurance company said: We re able to process more requests because we ve freed up time with Datacenter Care. This benefits the end user, who gets new installs or expansion of storage as needed, and it saves their time. Document # IDC. Page 12

13 We need less time to release an application with Datacenter Care We ve increased operational effectiveness because they help us standardize and integrate systems. This combined helps us get faster time to market.» Application development impact: The United States based transportation company explained: We need less time to release an application with Datacenter Care We ve increased operational effectiveness because they help us standardize and integrate systems. This combined helps us get faster time to market. TABLE 3 HPE Datacenter Care Business Productivity KPIs Per Organization Per 100 Users Average net user productivity 0.4% increase operating efficiencies Average improved application performance 10.0% Faster application development 14.3% Additional revenue per year $600,000 $6,619 Assumed operating margin 15% 15% Operating margin gain per year $90,000 $993 Source: IDC, 2015 Business Impact: Moving the Business Forward with Innovation and New Technologies HPE customers also value being able to leverage advice, guidance, and best practices with Datacenter Care about adopting and benefiting from new technologies. They credited HPE with proactively seeking to support them in organizational technological initiatives such as cloud computing, Big Data and analytics, and employee mobility. Interviewed organizations provided examples of how Datacenter Care has helped them pursue such technological initiatives:» Cloud. The United States based transportation company has leveraged HPE s expertise to support its cloud migration strategy: HPE has helped us identify opportunities for moving to the cloud and delivering flexible infrastructure that we could extend from our datacenter out to the cloud.» Mobility. The EMEA-based financial institution attributed its ability to deploy mobile applications to more users in part to increased confidence in its ability to provide the support required for these applications with HPE Datacenter Care. Document # IDC. Page 13

14 IDC calculates that these organizations will achieve discounted business benefits worth an average of $105,338 per 100 users over three years ($9.55 million per organization). IDC projects that these organizations will record an average ROI of 413% and break even on their investment in Datacenter Care in just over two months.» Virtualization. The United States based healthcare company credited advice provided through Datacenter Care with helping it identify a problem with legacy applications through the customized solution for cloud, which has enabled its virtualization efforts. ROI Analysis IDC uses a discounted cash flow methodology to calculate the return on investment and payback period for the organizations investment in and use of HPE Datacenter Care. ROI is the ratio of the net present value (NPV) and discounted investment. IDC s three-year ROI analysis of HPE customers use of Datacenter Care service shows that these customers will spend a discounted average of $20,517 per 100 users over three years ($1.86 million per organization). IDC calculates that based on this investment, these organizations will achieve discounted business benefits worth an average of $105,338 per 100 users over three years ($9.55 million per organization). IDC projects that these organizations will record an average ROI of 413% and break even on their investment in Datacenter Care in just over two months (see Table 4). TABLE 4 Three-Year ROI Analysis Average per Organization Average per 100 Users Benefit (discounted) $9.55 million $105,338 Investment (discounted) $1.86 million $20,517 Net present value (NPV) $7.69 million $84,821 Return on investment (ROI) 413% 413% Payback period 2.3 months 2.3 months Discount rate 12% 12% Source: IDC, 2015 Challenges/Opportunities IDC believes that as IT organizations increasingly look to support providers to help streamline IT operations and improve IT service delivery, HPE will have the opportunity to expand the adoption of HPE Datacenter Care service. Specifically, IDC recommends that HPE leverage the customer success stories highlighted in this study to illustrate the broad mix of potential benefits associated with HPE Datacenter Care service. IDC research consistently finds that CIOs Document # IDC. Page 14

15 and IT managers frequently do not understand the depth of features and functionality available through their support providers, for both existing support deliverables and additional support packages. Ongoing marketing communications with specific customer stories can help address that problem. IDC also recommends that HPE continue expanding multivendor capabilities and services in the HPE Datacenter Care portfolio. IT organizations often struggle to coordinate support efforts across diverse IT landscapes, and many are looking for support providers that can just make it work. IDC research also shows most enterprises now include hybrid IT environments, with both on-premises and cloud/as-a-service solutions that must work together. HPE has consistently demonstrated success working with hardware and software vendors to deliver comprehensive, integrated support across multiple technologies, and IDC expects that HPE will utilize that advantage to expand those capabilities across integrated hardware, software, and cloud solutions. However, IDC also anticipates that HPE will face some challenges in the dynamic market of support services. Most importantly, HPE will have to shift the support conversation away from deliverables and hours to strategic benefits and advantages, as outlined in the previous section. Increasingly, IT management in hybrid environments requires a comprehensive, integrated support experience across disparate technologies from multiple providers. HPE will have to continue to demonstrate to customers the capabilities of Datacenter Care as part of the sales process, with detailed references and testimonials from existing customers to help guide the way. Further, IDC expects that HPE as well as the software and hardware support market in general will face increased competition from single-source integrated system providers with regard to high-quality support services and overall solution performance. The promise of integrated systems is one of thoroughly tested, fully integrated solutions guaranteed to work together without issues of heterogeneous complexity and cross-vendor support. In addition, support services can often be delivered quickly and efficiently to all components in the stack from a single provider. Although these high standards have yet to be achieved by any single technology vendor and remain very difficult to attain, IDC expects that pressure for this improved performance will continue to reverberate throughout the support industry for the foreseeable future. Document # IDC. Page 15

16 Conclusion As IT environments continue to grow more complex and interconnected, CIOs and IT managers will struggle to optimize IT management and improve service delivery. IDC believes IT organizations will increasingly look for support providers that can serve as a single point of contact with a broad, comprehensive approach to support across the IT landscape. In addition, IDC expects more support providers will expand their offerings to include the expertise and guidance necessary to adopt new technologies that can improve business performance. To better meet the needs of these demanding customers, HPE has designed Datacenter Care to include almost all aspects of datacenter management across heterogeneous technologies from multiple providers. IDC believes HPE Datacenter Care service is a suitable choice for customers looking for a single-source support provider that can address specific IT and business strategies in today s complex IT environments. Appendix Methodology IDC utilized its standard ROI methodology for this project. This methodology is based on gathering data from current users of HPE Datacenter Care as the foundation for the model. Based on these interviews, IDC performs a three-step process to calculate the ROI and payback period:» Measure the savings from reduced IT costs (staff, hardware, software, maintenance, and IT support), increased user productivity, and improved revenue over the term of the deployment.» Ascertain the investment made in deploying the solution and the associated training and support costs.» Project the costs and savings over a three-year period and calculate the ROI and payback for the deployed solution. IDC bases the payback period and ROI calculations on a number of assumptions, which are summarized as follows:» Time values are multiplied by burdened salary (salary + 28% for benefits and overhead) to quantify efficiency and manager productivity savings.» Downtime values are a product of the number of hours of downtime multiplied by the number of users affected. Document # IDC. Page 16

17 » The impact of unplanned downtime is quantified in terms of impaired end-user productivity and lost revenue.» Lost productivity is a product of downtime multiplied by burdened salary.» Lost revenue is a product of downtime multiplied by the average revenue generated per hour.» The net present value of the three-year savings is calculated by subtracting the amount that would have been realized by investing the original sum in an instrument yielding a 12% return to allow for the missed opportunity cost. This accounts for both the assumed cost of money and the assumed rate of return. Because every hour of downtime does not equate to a lost hour of productivity or revenue generation, IDC attributes only a fraction of the result to savings. As part of our assessment, we asked each company what fraction of downtime hours to use in calculating productivity savings and the reduction in lost revenue. IDC then taxes the revenue at that rate. Further, because IT solutions require a deployment period, the full benefits of the solution are not available during deployment. To capture this reality, IDC prorates the benefits on a monthly basis and then subtracts the deployment time from the first-year savings. Note: All numbers in this document may not be exact due to rounding. IDC Global Headquarters 5 Speen Street Framingham, MA USA idc-insights-community.com Copyright Notice External Publication of IDC Information and Data Any IDC information that is to be used in advertising, press releases, or promotional materials requires prior written approval from the appropriate IDC Vice President or Country Manager. A draft of the proposed document should accompany any such request. IDC reserves the right to deny approval of external usage for any reason. Copyright 2016 IDC. Reproduction without written permission is completely forbidden. About IDC International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications and consumer technology markets. IDC helps IT professionals, business executives, and the investment community make fact-based decisions on technology purchases and business strategy. More than 1,100 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries worldwide. For 50 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world s leading technology media, research, and events company. Document # IDC. Page 17